Cover image for Farm management : principles and strategies
Farm management : principles and strategies
Olson, Kent D.
Personal Author:
Publication Information:
Ames, Iowa : Iowa State Press, [2004]

Physical Description:
xiii, 429 pages : illustrations ; 27 cm
The scope of farm management -- The farming environment -- The functions of management -- The decision process -- The farm business life cycle -- A business plan -- Strategic management -- A game plan -- Crafting a strategy -- Strategic planning -- Strategy implementation -- Strategic control -- Marketing plan -- Marketing plan components -- Historical price patterns -- General price forecasting methods -- Marketing control -- Budgeting -- General budget terminology -- Types of budgets -- Microeconomic principles for management -- Budget development -- Production and operations management -- Process mapping -- Improving the current process -- Enterprise selection -- Input supply management -- Scheduling operations -- Quality management and control -- Quality defined -- The costs of quality -- Quality management -- Process control -- Tools for process improvement -- Financial analysis -- Understanding financial statements -- Measures of financial position and performance -- Initial analysis -- Diagnostic analysis -- Financial management -- Sources and uses of capital -- Calculating loan payments -- Estimating the cost of credit -- Cash flow management -- Financial control -- Investment analysis -- The time value of money -- Investment analysis (a.k.a. capital budgeting) -- Land purchase and rental -- Purchasing land -- Land rental -- Risk management -- Sources of risk -- Managing risk -- Crop insurance -- Making risky decisions -- Scenarios for management planning -- Production contract evaluation -- Types of production contracts -- Evaluating production contracts -- A production contract checklist -- Staffing and organization -- Human and employee needs -- Human resource management -- Business organization -- The future farm manager -- Farmers' responses -- Concluding comments.
Subject Term:
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Call Number
Material Type
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Item Holds
S561 .O48 2004 Adult Non-Fiction Non-Fiction Area

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Designed to teach the farm managers of tomorrow, Farm Management emphasizes the strategic and operations aspects of managing a farm. Today's farm managers will want to consult it as well to improve the effectiveness, objectivity, and success of their decisions.

This innovative textbook is framed by the increasing need for farmers to develop and follow a business plan. Topics not found in traditional farm management texts include: Strategic management; How to evaluate, choose, and implement the business strategies that best fit the farm and the farmer; Production and operations planning; How to benefit from techniques and management tools used in general business; Quality management and control that will decrease costs and meet consumer demands; Production contract evaluation; Decision making beyond the traditional microeconomic analysis: decision making under risk and the development of scenarios to understand the impact of an uncertain future.

Fundamental farm management topics and basics are not ignored in this all-inclusive text. Traditional material includes budgeting, marketing, enterprise selection, production planning, financial analysis, financial management, investment analysis, risk management, work force management, business organization, and control management.

Student learning will be enhanced by review questions and a glossary in the book. Other ancillary material: study notes, virtual field trips, a test bank, class assignments, instructions on how to produce local examples to complement the examples in the text, and worksheets for students are available on the author's website or on a CD-ROM.

Author Notes

Dr. Kent Olson is professor in the Department of Applied Economics at the University of Minnesota. He is involved in applied research, on-campus teaching, and extension education. He has taught farm management for 25 years on campus and in extension settings. His research emphasizes farm level management issues, especially the interaction between farming and the environment, sustainable agriculture, decision-making, alternative production technologies, and the impact of government policies. Dr. Olson has also been the state coordinator for two farm record associations in Minnesota. He grew up on a farm in north-central Iowa, graduated from Iowa State University, and was a farm management extension specialist at the University of California-Davis before joining the faculty at Minnesota in 1985. He and his siblings continue to own and manage a farm in Iowa.

Table of Contents

Prefacep. xi
1. The Scope of Farm Managementp. 3
The Farming Environmentp. 6
The Functions of Managementp. 7
The Decision Processp. 11
The Farm Business Life Cyclep. 13
A Business Planp. 16
2. Strategic Managementp. 21
A Game Planp. 22
Crafting a Strategyp. 23
Strategic Planningp. 24
Strategy Implementationp. 61
Strategic Controlp. 64
3. Marketing Planp. 69
Marketing Plan Componentsp. 69
Historical Price Patternsp. 73
General Price Forecasting Methodsp. 78
Marketing Controlp. 81
4. Budgetingp. 85
General Budget Terminologyp. 86
Types of Budgetsp. 95
Microeconomic Principles for Managementp. 101
Budget Developmentp. 109
5. Production and Operations Managementp. 127
Process Mappingp. 128
Improving the Current Processp. 134
Enterprise Selectionp. 139
Input Supply Managementp. 142
Scheduling Operationsp. 144
6. Quality Management and Controlp. 155
Quality Definedp. 156
The Costs of Qualityp. 158
Quality Managementp. 159
Process Controlp. 170
Tools for Process Improvementp. 182
7. Financial Analysisp. 189
Understanding Financial Statementsp. 190
Measures of Financial Position and Performancep. 206
Initial Analysisp. 218
Diagnostic Analysisp. 226
8. Financial Managementp. 233
Sources and Uses of Capitalp. 233
Calculating Loan Paymentsp. 235
Estimating the Cost of Creditp. 237
Cash Flow Managementp. 238
Financial Controlp. 245
9. Investment Analysisp. 251
The Time Value of Moneyp. 251
Investment Analysis (a.k.a. Capital Budgeting)p. 258
10. Land Purchase and Rentalp. 275
Purchasing Landp. 275
Land Rentalp. 280
11. Risk Managementp. 293
Sources of Riskp. 294
Managing Riskp. 295
Crop Insurancep. 299
Making Risky Decisionsp. 303
Scenarios for Management Planningp. 308
12. Production Contract Evaluationp. 319
Types of Production Contractsp. 320
Evaluating Production Contractsp. 321
A Production Contract Checklistp. 324
13. Staffing and Organizationp. 335
Human and Employee Needsp. 335
Human Resource Managementp. 339
Business Organizationp. 353
14. The Future Farm Managerp. 363
Farmers' Responsesp. 363
Concluding Commentsp. 369
A. Estimating the Annual Costs of Capital Assetsp. 371
Estimating Average Annual Machine Costsp. 371
Estimating the Annual Costs of Building Servicesp. 377
B. Supplemental Information for Financial Analysisp. 379
Other Financial Measuresp. 379
Inventory of Resourcesp. 381
Checking Record Accuracyp. 384
C. Estimating Subjective Probabilitiesp. 387
Rules for Estimating Probabilitiesp. 388
Choosing Data Intervals for Probability Estimationp. 388
Estimating Subjective Probabilitiesp. 390
D. Interest Tablesp. 403
Glossaryp. 409
Bibliographyp. 421
Indexp. 425